TIC 2019-05-07 Item 2D - Change Order #4 - 42nd Avenue South Phase III / Gilliam Creek Culvert Replacement with Active Construction

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City of Tukwila Public Works Department - Henry Hash, Director INFORMATIONAL MEMORANDUM TO: Transportation and Infrastructure Committee FROM: Henry Hash, Public Works Director g4 BY: Peter Lau, Senior Program Manager CC: Mayor Allan Ekberg DATE: May 3, 2019 SUBJECT: 42nd Avenue South Phase III & Gilliam Creek Culvert Replacement Projects Project Nos. 99410303 & 99341208, Contract No. 17-090 Change Order No. 4 Allan Ekberg, Mayor ISSUE Approve Change Order (CO) No. 4 with Active Construction, Inc. (ACI) to resolve all new claims and disputes for the 42nd Avenue South Phase III Project. BACKGROUND Due to continuous issues with excessive ground water interference during excavation, changes and conflicts for Seattle City Light (SCL) facilities, design issues, some inefficiencies by the contractor, and other unanticipated utility conflicts, the 42nd Avenue South Phase III Project encountered schedule delays and cost overruns. DISCUSSION Change Order No. 3 was a compromise between the City and ACI to resolve outstanding construction disputes through May, 2018, which was approved by Council in July, 2018. The execution of CO No, 3 avoided potential claims and a possible legal battle with substantial legal fees by both parties and produced cost savings for the City. After the execution of CO No. 3, PW staff and ACI worked cooperatively together to move the project forward. However, for the reasons stated above and more unanticipated issues, the project cost overruns continued. After extensive discussions and negotiations between PW staff and ACI, a mutual agreement was reached and both parties agreed that it is in their best interest to complete the project in the most efficient way possible. The new compromise is documented in Change Order No. 4. In summary, CO No. 4 will: • reduces the 14% mark-up rate (established in CO No. 3) to 12.5%, which still covers ACI's bond, insurance, other general and administrative overhead costs, and profit. This change will result in a savings of $164,000 for the City; • enables City project staff to continue to work cooperatively with ACT's construction crew, in order to efficiently complete the construction project with the least amount of cost; • requires ACI to physically complete the project within six weeks after the utility conversion work is completed; • resolves all outstanding claims and disputes between the City and ACI and agrees not to pursue legal action against each other when this CO is strictly followed. W:1PW Eng1PROJECTSIA- RW & RS Projects142nd Ave S Phase III (99410303 94-RS03)1Constructionl#.500 - Project Payments1030 - Change Proposals & COs1C0 #4 - Cost Plus 211nfo Memo for CO #4 gl 050319, pl,gl 042519.docx 29